tv Nightly Business Report PBS September 1, 2009 6:30pm-7:00pm EDT
gharib, paul kans and the n.b.r. team. "nightly business report a.g. edwds. help make sure your nestgg is rey when retirement arrives. a. edwards-- fully invested in our clients. franklinempleton investments. providing a uniqueerspective through the spialized investment expertise of franklin templet mutual series and fiduciaryrust. frklin templeton investments. gain from our rspective. >> this program was made possle by contributions to like you.ation from viewers thank you. captioning sponsored by bt >> susie: good ening, everyone. the demographics, characterists, of the american
population a about to undergo some of their biggeschanges ever. as one populion expert put it, "during the next dece, we can expect to see an america thais older, more hispanic a more feminine." jeff yasne has this preview ofhere the population is headed. >> reporr: coastal cities in the u.s. miami, new york, los angeles-- have lonbeen home to rge and growing hispanic communities. but demographe say the biggest trend in recent years is the influx of hispanic famies lured by jobs and ss expensive home prices to the interior of the country. and as erika miller reports, many market perts are recasting another scary septber. >> repter: as summer draws to a close, change is in e air-- d we're not just talking abo the leaves. if seasonapatterns hold true, september y also be a time of trantion for the stock market, d not the good kind. according to the sck trader's almanac, sce 1950, the s&p 500 inx has tumbled an average of .07% durinthe month.
septber is also the worst month for the dow d nasdaq. most invtors haven't forgotten st september, when lehman brother's deared bankruptcy, pushing the rket down more th 9%. but calend aside, strategist doug roberts saystocks are ripeor a 5%-15% percent puback. i think there's going to be some type of a corction. you came o of a long, prolged rally. the's uncertainty, high luations. people are conceed about that. there's gointo be some type of a correction, which yore starting to senow. >> reporr: but others believe that ithere is trouble, it will come inhe second half of the month. that's when coanies typically start to preannounce trd quarter earnings strategist cra peckham says revenues wl be closely sctinized. >> i think if we see an eaings season where you get a lot o posive surprises in the earningsine that are not accompanied by positiv surprises on the sales line, then i'm not sure that's goi to be enou to continue the march hier in equity pris in the main. >> reporter: there are big questions abt where the market
ads beyond september. so experts warn of potential trouble towas the end of this year and into next, especial if the government's stimus efforts fade. doug robts says unemployment shou be a good predictor of the direion of the economy and the stock market. >> the consumer-- even if yo give him every deal inhe world-- may sit there and go out a buy a hoe, buy a car, buy light, buy a washer if you agree to pay for hf of his costs. but ultimately, ng term, that's not goi to change his behavior unless he feelsome security with his job situion. >> reporte change is evitable, and not always a b thing. it also creates opportities. buand-hold investors can often use seasonal pullbacks to thr advantage by buying shes of solid compans swept down with the pack. erika miller, "nigly business report," new york. >> sie: august turned out to be a banza for two big automakers, thanks tthe cash for clunkers incentive. for two others, thnews wasn't so good. stil "clunkers" may put the
industry on trk to post its first monthly sales crease since october 2007. sales ford motor surged 17%. its focus and escapeehicles werewo of the top eight models sold in thgovernment's rebate program. but general moto went into reverse, dn 20%. sales at chrysler also fell,ff 15%. cash for clunkers accelerad dealership actity for toyota; s sales jumped 6%. ed sheehy, president of southeast toyota dtributors, sees tt momentum continuing. >> becau of pre-clunker momentum and now cnker surge, producon has picked up, so deal shelves will be restocked in coming months. while we may anticipate tha september may get off to lowethan-average start, by d-month and then going into october and the enof the year, sales rates wi be, i would say, in excess of whathey were
in the se period last year. >> susie: sheehy predicts les will pick upown the road as nsumers deal witwhat he calls a ew normalcy." he says americans think th worst is over fothe economy. >> paul: and accordi to another measurof the economy, may be right. pending home sal rose to their hiest level in two years in july. theyere helped along by that first-time he buyer tax cred. the national assoction of realtors' indeof signed sales ntracts rose 3.2% to a readi of 97.6%. that's a full point better tn expected and shows the hsing market is reunding from histic lows. but thatebound could come to a inding halt. analysts expect a g drop off in sales when the first me buyer tax credit expires november 30. those pendg home sales and a sod rise in the nation's nufacturing activity helped ll street open with modest gains. and e note here: normally, we'd show you a art of the day's tring, but we're having some computer probms.
so, in any case, an hournto trading, theow posted a 25- poingain, with the nasdaq up 18 points. then came a steep ll-off triggered by cputer sell programs and investors who believe stocksave gotten overpriced agast the economic covery. thselling persisted and stocks cled at the day's worst levels. the dojones industrial average tumbled 185.68oints to 9310.60. the nasdaq lost 40.1to 1968.89. the p 500 dropped 22.58 to 998.04. in t bond market, the ten-year note gained 8/32 to 102-4/32 putting the yield at 3.37%
weust had a power failure, i'm afraid,e'll try and get it back. three seniorepublican senators criticized the obama healthce plan at a foruin miami today, ying it helps the uninsured the pense of seniors and medicare. senators john mccain andel martinezalong mitch mccoell, sponred the session at a hospital. ey told the crowd that cuts healthcareunding would be needed iorder to pay for the obama plan, ich they claim would cost upwardsf $1 trillion to u.s. taxpaye. the senators s healthcare reform is needed, t the currt bill, written by democrats, also es little to help protect physians from nuisancealpractice lawsuits. >> susie: president obama ys americans shou be prepared for a bigger outbreak ofhe h1n1 flu rus, or "swine flu." the epidemic fst emerged in april,nd since then, more than 2,000 peop have died around the globe. health officia are concerned
about a surge of new ces this fall. one report sugges up to half the u.s. population cod catch swine flu during a pandemic. a vaccine against h1n1 iin the works and uld be ready by next month. >> pau one other medical note tonigh accused swindler allen stanfo is back in a texas prison after beingospitalized last week with aacing pulse. doctors say anford has a circation problem in his leg, which can be fixed bsurgery. stanfordook sick just hours before he was slated to apar in court in hoton. he's acced of masterminding a $7 billion fraud involving certificat of deposits and an offshore bank in antigua. he says he's innent of all the chges.
>>usie: ebay is cutting losses on its spe experiment.it selline 's selng a 65% staken the ternet phone service to prive investors. the price: about2 billion. that's far less an the $3.1 billion that ebapaid for skype in005. thbuyer: an investment group including silver lake rtners and netscape founder marc andreessen. ebay will now be able focus on its core online aucon business and itsuccessful paypal electnic payment serve. ebay oginally hoped auction customers would usskype's calling and chatting svices to buand sell goods, but, paul, as you know, that never happened. ebay shares closed the day dn 46 cents at $21.68. it was trading around $1a share in july wh talk of a
>> paul: as we notedit wasn't a good day for financi stocks. but in tonight's "of mutua interest" segment, we'll fus on a mutual fund that's done well by investing the stocks of smaller fancial companies: f.b.r. small cap financial fd. in the first eight months ofhe ye, it is up 22%. over the lger term, it's been consistently ahe of other funds its category, returning an average of almost 11% aear over the past decade. david ellison hamanaged f.b.r. small cap financial since it inception. and david,elcome to "n.b.r."
>> hello, ul, it's good to be back. >> paul: one reas your fund is doi well is that it was mostly in sh earlier this year when the market was crashing. why were you srt enough to sit on the side line? >> well, i guess i maybe not smart enoughbut i went through th '87, '92,'95 cycle, and i think leaed ck then tt once nonperformers starto tick up it wasime to start pulling back. so aut six,seven quarters o when th nonperforming assetsf the industry start to re, i started to cut back my positio. >> paul: so now you've gone back in to the market? >> yes, a i thinkhat's happened is that 've seen stilization in some of the markets, t housingarket appears to have tablize there's been a lot of capital raed in the industry. e federal government is invoed. so the industry is starting to heal itself and now it's time to start toeinvest in the industry. >> paul: you'r not fully inveed yet? >>h, i've gotabout less than 5% in both funds, so ve
gotten back to the iustry pretty heavy now. but i think this is really three to five-year ych they'll we're in now, gng from fundamentally ugly to okay to go to great. as thefundamentals improve over the next knife to seven years. >> paul: small financial stocks have bee much better than larger ones, but there are new woies thisroup may feelhe impact of bad loans. aryou concerned about this? >> wl, there wille additional bad loans, there wi be bank failures, some are predictin other two or 300. bu there's fiveto 700to invest in, so there's plenty of well-ru banks out the thatre come tough this cycle that are dng the things to t better tt i would invest in. plus tconsolidation of the industry ford on us byhe fdic will be a posive for those who survive. >> paul: what are some of the laest holdings in your portfolio and why do u like them? >> well, i likell ofhem generally because, ain, fundamenta are improving,
theye gone through a edit cycle, some names like webst, keomerica, a bigger cap name, names like historia in new yo, tcf out of minnpolis, i have about 80 names in thepoif portfolio. so this is not a one-trick pony i'm trying t give the refer a broa expure to the industry. >> paul:o you personally wn anof the stocks you ntioned? >> i cerinly do through the funds, ask that's the way i've done it for a lo time and plan to coinue to do so. >> paul: so indirectly you do own them? >> yes, absolutel paul: until today we saw quite a big runupin the financial sectorith the s&p financials up mo than 130% since march. do youhink that rally is over or is this just temporary pae? >> people alws argue the stocksre ahead of the fundamentals, the fundamentals are ahead of the stocks. what i'm fgsing on is that we have an enviroent -- focusingn is that we are an environmenwhere the
fundamentals will beetting better over the nex three to fiveears and you want to balance in the gro. so today is onegroup out of the many and it doesn't matter, the question is do you want to here the nt the to five years. >> pl: very good, i appreciate your coents and sharing your views o the financial segment of the market. i want to thank you for bei with us once again. >> you're welcom paul. >> paul: my guest: david ellon of the f.b.r. all cap financiafund. >> susie: morrow, does the ock market charge like a bul or growl like a ar? we get some answers fr street critiqueuest hilary kramer. american airlines is deali wi a downturn in air traffic by downsizinits roster of flht attendants. the carrier is elimiting 921 flight aendant jobs effective the beginning next month. american is cutting flht capacity by 5% this year as it copes with lower demanfor travel and vatile fuel costs. >> paul: newspaper publish
eedom communications filed f chapter 11 bankruptcy toy. the owner of california's ange county "register" s debts of more than billion and assets of only half that. the firm has been struggng to co with a huge drop in vertising revenue during the recession. freedois the tenth newspaper publisher to go bankpt over the pastear.
>> susie: he's a look at now what's hpening tomorrow: e july reports on factory orders and second quter producvity are released, as well as weekly crude o and gasoline invtories. this is perhaps the ughest job market since the great depression. morehan six million americans are drawing unployment benefits, and ny others have se their benefits run out. for the nexthree nights, we'll look at somef the people behind those fures. in part e of "once upon a job," diane eastabro intruces us to an out-of-work sales execute trying to jumpstart his career with lp from his family. >> rorter: it's 9:00 a.m. and n leunig's at work trying to find work. >> i was a channel ses manager for tosha, and i was given a 60-day notice on march 12. goal is to find another
position where ianage national acunts and/or regional accounts. i usually go iright away and dole check the jobs. anit will come up with 1,900 jobs. >> reporte for leunig, job nting is now his full-time job. >> if you're not spending least six eight hours a day, i would say fo days a week, yore probably giving yourself a bad chance of geing a new positi. >> reporter: lnig, his wife kaand daughter jennie have lived comfortable life in this home in guee, illinois, for the past 12 years. leunig thinks his severance package will carry the famy another seven ten months, but still e job loss has brought stress and lestyle changes to this family. >> hel. this is ka reporter: wife kat is helpi ma ends meet with a part-time job at a small comny.
>> my paycheck really doesn' add very mh to the bills, so what i provide is minimal. i think it will pan ouand he will go back to work, buit concns me what could happen in the future. >> rorter: 12-year-old jennie is pitching in; she'trading clothes with her bt friend instead of buying new onesnd e's asking for fewer things. >>ell, i have a lot of toys left over fr when i was a little smaller, and insteaof getting, like, newhings, we just decided to repa some of the d things, like this elephant. my gndma just sewed her up. >> reporter: with s family's suppor leunig presses on, >> i'm dan leunig, a i'm a sales profsional, and i have about 20 years sales experiee. repoer: ...taking his job search to a networki seminar for jobls professionals.
my target companies are abbott labs, zebra tecologies, u-ne. >> repter: leunig says networking has gotn him some good j leads. still, the seminar's organer cautions landi a job could takeeveral more months. >> i wou say our average lengthf time that someone is out in ts group, in this category, is about 13 months reporter: leunig knows his job search could te awhile, but 's optimistic he'll find a position soon. >> cup of coconut? >> cup of conut, please. >> reporter: so, f now, he's makinghe best of a bad tuation. >> i lovto bake. with jennifer, it's pleasure. we do it aa daddy/daughter ing. i'm a fan of ccolate chips. toome extent, i think she's going to look back othis summer and s, "this was the st summer i ever had because daddy had a break. >> reporter: dia eastabrook, "nigly business report," gurnee, illinois. >> sie: tomorrow, diane introduces us to a forr technology professional o, at 54, is out of a job r the first timen her career.
>> paul: employment is also tough ise for young workers. according to a new survey, ls than a third of theman afford to pay their bills and sava bit of money. 40% of employees ages 18o-34 say they a "worried and concerned" about achievingheir financial gos. 55% of respondents use t words "hopeful and confident" out achievintheir financial goal in the next five years. it's n just younger people who e impacted by theconomy; a thd of all young workers still live wittheir parents. the surv was conducted by the a.f.l./c.o. federation of labor unions. recapping day's market action: stoc take a pounding on continuing worries about t economy. the dow fell 1 points and the sdaq lost 40. to lrn more about the stories in tonight's brocast, to watch our streaming video and toake rt in our daily blog, go to "nightly business report" on pbs.org. u can also email us at firstname.lastname@example.org.
>> susieand finally tonight, a tennessee company mahave the silver lining when the cud of disaster sikes. it's a ptable shelter that can be assembl with the push of a button, mplete with power, heating and air conditioning the firmadaptive methods, says the units unld camper-like in about o minutes and provide a safe, secure, hard-wled shelter. they can be easily shied by truck and used after a nural disaster, by the military in war zos. anpaul, i just know what you're thinking: these tngs would have me a big difference four years ago when hurrican katrina hit the gulf coa. right? >> pl: and when wilma t florida, absolutely right. >> susie:and hurricane andrew, it wou come in very handy. >> paul: it will just be a little while before you'll see bigdvertising posters those things, i'm sure. >> susieyou're right about that.
well, that's "nightly siness report" fotuesday, september 1. i'm susie ghar. good night, evyone. and good nht to you, paul. paul: good night, susie. i'm paul kangas wishg all of you the st of good buys. "nightly business report" is made possible : this program was made ssible by conibutions to your pbs station from viewers le you. ank you. caioning sponsored by wpbt captned by media cess group at wgbh access.wgbh.org li